Academic journal article American Criminal Law Review

Mail & Wire Fraud

Academic journal article American Criminal Law Review

Mail & Wire Fraud

Article excerpt

I. INTRODUCTION II. ELEMENTS OF THE OFFENSE

A. Scheme to Defraud

1. Traditional Frauds

2. Fraud Involving Intangible Rights

B. Intent to Defraud

C. Mailing in Furtherance of a Scheme

1. Causing the Mails to be Used

2. The "In Furtherance" Requirement III. DEFENSES IV. VENUE V. SENTENCING

I. INTRODUCTION

To federal prosecutors of white collar crime, the mail fraud statute is

our Stradivarius, our Colt 45, our Louisville Slugger, our Cuisinart--our

true love. We may flirt with RICO, show off with 10b-5, and call the

conspiracy law `darling' but we always come home to the virtues of

18 U.S.C. 1341, with its simplicity, adaptability, and comfortable

familiarity. It understands us and, like many a foolish spouse, we like

to think we understand it. . . (1)

As the above statement by a former federal prosecutor indicates, the mail(2) and wire(3) fraud statutes have always been used as a powerful prosecutorial tool. The purpose of the two statutes is to prevent the use of the mails or wires(4) in the furtherance of fraudulent activity. While the two statutes were separately codified, and contain slightly different jurisdictional elements, a majority of the case law dealing with the statutes has concerned the meaning of a "scheme to defraud" and the courts have generally considered the two statutes in conjunction with one another.

The two statutes have been widely used to "cover not only the full range of consumer frauds, stock frauds, land frauds, bank frauds, insurance frauds, and commodity frauds, but [also]. . . such areas as blackmail, counterfeiting, election fraud and bribery."(5) They have also been useful in prosecuting money laundering and violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO").(6) Violating [sections] 1341 and/or [sections] 1343 can create the unlawful acts necessary to establish a RICO(7) or money laundering violation.(8) Once a mail fraud or wire fraud offense has been proven, both the RICO and the money laundering statutes allow for more severe penalties.(9)

When legislatures have proven slow to act to combat certain types of crimes, the mail and wire fraud statutes have often served as a "first line of defense"--serving as a "stop-gap device which would permit the prosecution of newly-conceived frauds until such time that Congress enacted particularized legislation to cope with new frauds. "(10) The mail and wire fraud statutes have, therefore, been referred to as "at least one secret weapon"(11) possessed by federal prosecutors.

In 1994, responding to the ever-increasing threat of new innovations such as telemarketing fraud, the federal mail fraud statute was amended to cover not only the United States Postal Service (USPS), but private interstate commercial carriers as well (United Postal Service, FedEx, DHL, etc).(12) Because many of these telemarketing ploys were directed at the elderly, Congress promulgated the Senior Citizens Against Marketing Scams Act ("SCAMS"), which specifically criminalized telemarketing fraud.(13) The SCAMS Act of 1994 enhanced the penalties for mail and wire fraud convictions when targeted at individuals aged 55 and over.(14)

This article concentrates on the mail fraud statute because it has been utilized more frequently than its wire fraud statute counterpart. However, with the rapid advance of technology, the wire fraud statute may soon overshadow its more popular counterpart.(15) While jurisdictional differences exist between the statutes, they are sufficiently similar in their wording that court decisions addressing the character and scope of one statute are generally applicable to the other.(16) The sections that follow outline the elements of mail fraud and address interpretations of and changes to the elements brought about by court rulings and legislative action. …

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